SENATE 


63d  Congress  \ 
1st  Session  / 


/ Document 
l No.  131 


COMPULSORY 

WORKMAN’S  COMPENSATION  LAW 

ADDRESS 

OF 

* 

HON.  GEORGE  SUTHERLAND 

UNITED  STATES  SENATOR 
FROM  UTAH 

TO  THE 

THIRD  ANNUAL  CONVENTION  OF 
INTERNATIONAL  ASSOCIATION  OF  CASUALTY 
AND  SURETY  UNDERWRITERS 
CHATEAU  FRONTENAC,  QUEBEC,  CANADA 


THE  ECONOMIC  VALUE  AND  SOCIAL  JUSTICE 
OF  A COMPULSORY  AND  EXCLUSIVE 
WORKMEN’S  COMPENSATION  LAW 


w 


PRESENTED  BY  MR.  CHAMBERLAIN 
July  14,  1913. — Ordered  to  be  printed 


7 Jk  (4  4.M-.F 


33  [.  L 


COMPULSORY  WORKMEN’S  COMPENSATION  LAW. 


Mr.  President  and  Gentlemen  of  the  Convention  : 

Conditions  produce  opinions  which,  when  sufficiently  potential,  find 
expression  as  law.  Changed  opinions  naturally  result  from  changed 
conditions,  and  as  conditions  are  never  at  a standstill  it  follows  that 
the  law  of  one  generation  never  quite  satisfies  the  sentiment  of  the 
generations  which  follow.  It  is  the  business  of  the  lawmaker  to  de- 
termine— and  sometimes  determine  at  his  official  peril — out  of  the 
multitude  of  opinions  that  from  time  to  time  develop  which  of  them 
are  sufficiently  substantial  to  be  given  statutory  expression.  The 
general  demand  for  a wiser  and  juster  adjustment  of  the  burden  re- 
sulting from  accidental  injury  sustained  by  workmen  in  their  employ- 
ment presents  to  the  legislator  one  of  these  problems,  the  correct  solu- 
tion of  which  not  only  requires  him  to  know  what  is  demanded  but 
to  understand  the  conditions  out  of  which  the  demand  arose. 

Blackstone,  writing  150  years  ago,  includes  master  and  servant, 
along  with  husband  and  wife,  parent  and  child,  guardian  and  ward, 
in  a class  whose  reciprocal  obligations  result  from  status  rather  than 
from  contract.  The  explanation  of  this  classification  is  probably  to 
be  found  in  the  fact  that  prior  to  Blackstone’s  day  the  servant’s  du- 
ties were  generally  of  a domestic  character,  but  with  the  vast  exten- 
sion and  diversification  of  industry  the  relationship  of  employer  and 
employed  has  radically  changed,  until  it  is  no  longer  predominatingly 
domestic  in  character  but  has  become  more  generally  a relation  apart 
from  the  household.  As  a consequence,  the  contractual  conception 
of  the  relation  of  each  to  the  other  has  more  and  more  supplanted  that 
which  originally  flowed  from  the  notion  of  status.  This  has  been 
strikingly  manifested  in  the  evolution  of  the  law  of  liability  for  per- 
sonal injury,  which  has  resulted,  until  recent  years,  from  judicial  as 
distinguished  from  legislative  activity,  and  nearly  every  development 
of  which  is  rooted  in  the  notion  of  contract. 

The  rule  by  which  the  master  was  held  liable  for  an  injury  to  the 
servant,  caused  by  the  former’s  negligence,  was  based  upon  his  im- 
plied contract  to  furnish  safe  appliances  and  a safe  place  to  work,  to 
provide  safe  methods  and  to  exercise  reasonable  care  to  protect  the 
latter  from  injury.  The  countervailing  rule  that  the  servant  could 
not  recover  where  the  injury  resulted  from  observed  or  clearly  ob- 
servable dangerous  conditions  was  based  upon  the  implied  under- 
taking of  the  servant  to  assume  the  risk  of  such  conditions — the  fel- 
low-servant doctrine  being  probably  a branch  of  this  general  rule. 

3 


4 


COMPULSORY  WORKMEN'S  COMPENSATION  LAW. 


These  various  rules  of  the  common  law  originated  at  a time  when 
all  the  circumstances  of  the  employment  were  of  a simple  and  open 
character ; but  as  complicated  machinery  has  more  and  more  taken  the 
place  of  hand  labor,  as  the  powerful  and  indirectly  applied  forces  of 
steam  and  electricity  have  been  substituted  for  the  simple  and  direct 
power  furnished  by  water  and  horses,  as  the  master  has  been  more 
and  more  removed  from  direct  contact  with  the  servant  through  the 
device  of  corporate  organization  and  the  interposition  of  supervising 
agents,  as  the  servants  of  the  same  master — originally  few  in  number 
and  working  side  by  side — have  grown  to  an  army,  no  longer  ac- 
quainted with  one  another,  these  rules  have  come  to  be  largely  with- 
out justice  or  justification.  From  time  to  time  they  have  been  modi- 
fied by  judicial  interpretation  and  the  invention  of  exceptions.  In 
recent  years  this  process  has  been  accelerated  by  legislative  action. 
Thus,  because  of  the  injustice  of  relieving  the  master  from  liability 
where  the  negligence  in  question  was  that  of  a superior  servant  o"r 
of  one  engaged  in  a separate  and  distinct  class  of  work,  the  follow- 
servant  doctrine  has  been  modified  bv  the  introduction  of  the  vice- 
principal and  separate-department  doctrines.  As  it  has  been  borne 
in  upon  the  consciousness  of  the  legislator  that  the  laborer  in  modern 
industry  in  this  day  of  sharp  competition  is  not  quite  free  to  accept 
or  refuse  work  at  his  pleasure,  the  doctrine  of  assumption  of  risk 
has  been  modified  or  overthrown ; and  in  this  way  the  former  common- 
law  defenses  of  the  master  have  been  abrogated  or  have  undergone 
radical  alteration.  The  whole  process  indicates  that  the  vice  of 
applying  the  common-law  system  to  modern  industrial  conditions 
arises  not  so  much  from  its  details  as  from  the  inapplicability  of  its 
fundamental  doctrines.  Legislation  which  continues  to  recognize  the 
general  applicability  of  the  system  and  attempts  by  the  introduction 
of  modifications  and  exceptions  to  reconcile  it  to  the  utterly  different 
conditions  of  our  day  is  not  a remedy  but  a palliative  merely. 
Thoughtful  students  of  the  subject  have  come  to  recognize  that  what 
is  needed  is  not  to  lop  off  dead  or  superabundant  branches,  but  to  cut 
up  the  tree  by  the  roots  and  substitute  for  the  entire  growth  of  em- 
ployers’ liability  the  new  system  of  workmen’s  compensation. 

We  have  thus  swung  round  the  circle  from  the  ancient  notion  of 
the  master’s  duties  based  upon  status,  through  that  of  employer’s 
liability  based  upon  contract  and  its  statutory  modifications,  to  the 
broader  conception  of  the  absolute  right  of  the  injured  workman  to 
compensation  from  the  enterprise  in  which  he  is  employed  and  to 
whose  success  he  contributes  his  work  for  the  sake  of  the  wages  as  the 
owner  contributes  his  capital  for  the  sake  of  the  dividends,  and  we 
are  brought  round  again  to  the  idea  of  status,  only  it  is  now  the 
status  of  industry  and  workman  instead  of  the  status  of  master  and 
servant.  In  this  new  conception  there  is  consistently  no  place  for 
any  part  of  the  old  common-law  system. 

Workmen’s  compensation  and  employers’  liability  proceed  upon 
wholly  different,  if  not  irreconcilable,  principles.  Employers’  liabil- 
ity for  personal  injury  is  based  upon  negligence,  against  the  existence 
of  which,  by  implication  of  law,  the  employer  has  contracted.  Work- 
men’s compensation  is  based  entirely  upon  the  relationship  which  the 
injured  workman  bears  to  the  employment  in  which  he  is  injured. 
While  statutes  have  been  passed  depriving  the  employer  of  the 
common-law  defenses  or  modifying  them  to  a more  or  less  radical  ex- 


COMPULSORY  WORKMEN'S  COMPENSATION  LAW. 


5 


tent,  under  all  of  them  the  necessity  of  showing  negligence  on  the 
part  of  the  employer  remains.  The  inherent  evils  of  the  common- 
law  system  of  liability  for  negligence  are  generally  conceded,  among 
the  most  prominent  being:  (1)  That  the  enforcement  of  the  em- 
ployee’s rights  results  in  great  waste  and  in  great  delay.  The 
employee,  being  generally  unable  to  pay  any  counsel  fees  in  the  event 
of  failure,  is  compelled  to  submit  to  the  payment  of  exorbitant  con- 
tingent fees  in  the  event  of  success.  Litigation,  because  of  the 
crowded  condition  of  the  court  dockets  and  for  other  reasons,  is  pro- 
longed indefinitely.  In  the  meantime  the  employee,  if  able  to  work, 
must  often  live  in  enforced  idleness  because  his  old  employer  will  not 
furnish  him  work  and  others  from  sympathy  with  the  employer  do 
not  do  so.  The  result  is  that  even  if  a large  or  extravagant  judgment 
is  obtained,  more  than  half  of  it  goes  to  the  lawyer  and  for  other 
expenses,  and  the  expenditure  of  the  remainder  is  largely  anticipated 
by  living  expenses.  (2)  Upon  the  happening  of  an  injury  a condi- 
tion of  antagonism  between  employer  and  employee  at  once  arises. 
The  employee,  naturally  desirous  of  securing  as  large  a payment  as 
possible,  consciously  or  unconsciously,  exaggerates  the  facts  tending 
to  show  the  employer’s  negligence,  and  the  employer  upon  his  side 
exaggerates  the  facts  tending  to  minimize  his  own  negligence  or 
emphasize  some  affirmative  defense.  Out  of  this  double  distortion 
the  truth  does  not  appear.  If  the  employee  is  honest  enough  to  tell 
the  exact  truth  he  may  not  recover  and  too  often  he  does  recover  by 
deliberate  untruth  or  by  coloring  the  facts  with  the  ingenious  aid  of 
counsel.  Thus  conscientious  truth  suffers  and  dishonesty  is  re- 
warded. The  measure  of  damages  is  so  uncertain,  so  much  is  de- 
pendent upon  the  bias  or  caprice  of  individual  jurors,  that  verdicts 
for  similar  injuries  differ  in  amount  to  the  widest  possible  extent. 
(3)  In  a large  proportion  of  the  cases,  particularly  in  death  claims, 
the  recipient  of  the  money  resulting  from  settlement  or  judgment  is 
wholly  inexperienced  in  handling  considerable  sums,  and  it  is  often 
quickly  frittered  away  or  lost  in  unwise  investment,  in  which  case, 
as  well  as  where  no  recovery  can  be  had  at  all,  the  unfortunate  em- 
ployee or  his  dependents,  in  case  of  death,  become  to  a greater  or  less 
degree  a charge  upon  the  charity  of  society. 

In  addition  to  this,  the  litigation  is  carried  on  at  great  public  ex- 
pense. In  the  United  States  probably  one-fifth  of  the  time  of  courts  i 
and  juries  is  taken  up  with  this  class  of  litigation. 

The  foregoing  may  be  exemplified  by  the  following  case,  the  facts 
of  which  are  not  at  all  out  of  the  ordinary : An  engineer  on  a western 
railroad  was  killed,  leaving  a widow  and  three  young  children. 
Before  the  body  of  the  dead  engineer  had  been  laid  away  the  widow 
was  importuned  by  an  agent  of  a firm  of  personal-injury  lawyers  to 
put  her  case  into  their  hands,  upon  an  agreement  to  pay  them  50  per 
cent  of  the  amount  recovered.  This  she  did,  and  suit  was  brought. 
At  the  end  of  three  years  of  litigation  a judgment  of  $10,000  in  her 
favor  was  paid.  Of  this  amount  she  received  $5,000  and  her  lawyers 
the  other  $5,000.  In  addition  to  the  $10,000  the  litigation  had  cost 
the  railroad  company,  as  nearly  as  can  be  estimated,  $2,500  more. 

It  had  cost  the  State  $625,  taking  a proportionate  part  of  the  salary 
of  the  judge,  the  expense  of  maintaining  the  court,  the  fees  of  the 
jurors,  and  so  on.  Thus  it  will  be  seen  that  in  order  to  get  $5,000 
into  the  hands  of  the  widow  and  children  the  railroad  and  the  State 


6 


COMPULSORY  WORKMEN'S  COMPENSATION  LAW. 


together  had  expended  $13,125.  Long  before  the  judgment  was  paid 
the  widow  had  exhausted  her  financial  resources  and  had  been  com- 
pelled to  do  hard  and  unaccustomed  labor  in  order  to  support  her- 
self and  family.  A part  of  the  money  which  she  received  went  to 
pay  debts  which  she  had  incurred.  She  was  a woman  wholly  unac- 
customed to  business  and  unfamiliar  with  investing  money.  She 
was  surrounded  by  friends  who  knew  precisely  what  she  ought  to 
do  with  the  money,  and  at  the  end  of  18  months  she  found  herself 
without  a dollar,  the  very  existence  of  herself  and  children  dependent 
upon  such  poorly  paid  work  as  she  could  do  and  upon  public  or  private 
charity.  And  yet  this  widow  was  far  more  fortunate  than  the  vast 
majority  of  her  sisters  similarly  situated,  more  than  half  of  whom 
receive  no  compensation  whatever. 

An  exhaustive  inquiry  carried  on  by  the  Federal  commission 

(appointed  to  investigate  this  subject  discloses  that  the  average  amount 
paid  by  the  railroads  in  the  United  States  to  the  dependents  for  a 
j death  claim  is  $1,221,  from  which  lawyers’  fees  and  other  expenses 
* must  also  be  deducted. 

These  are  some  of  the  evils  of  the  system  of  employers’  liability. 
How  can  they  be  most  effectively  and  justly  eliminated?  It  is 
obvious  that  a mere  alteration  of  the  details  of  the  common  law 
will  not  be  of  any  considerable  economic  value.  It  is  true  that  by 
abrogating  or  modifying  the  common-law  defenses  the  field  of  the 
employee’s  opportunity  for  successful  litigation  is  broadened,  but 
the  field  of  opportunity  for  waste  is  at  the  same  time  also  extended. 
It  is  likewise  true  that  some  employees  who  are  not  now  able  to 
recover  solely  because  a negligent  employer  can  establish  a good 
defense  will  under  these  alterations  be  able  to  recover,  but  it  is  safe 
to  say  that  more  than  one-half  of  the  workmen  who  are  injured  and 
a still  greater  proportion  of  the  dependents  of  those  who  are  killed 
will  still  be  unable  to  recover  because  of  their  inability  to  establish 
the  employer’s  negligence  or  because  the  accident  is  due  to  the  em- 
ployee’s sole  negligence  or  to  the  ordinary  risks  of  the  employment. 

Under  the  simple  conditions  which  at  one  time  existed  the  majority 
of  accidents  which  happened  were  due  to  somebody’s  want  of  care, 
because  there  were  no  inherent  dangers  in  the  use  of  manual  tools  and 
simple  appliances  in  the  usual  way  and  under  the  usual  circumstances; 
but  in  this  day  of  complex  appliances,  rapidly  moving  machinery,  and 
the  press  and  stress  of  abnormal  hurry,  a very  large  proportion  of  all 
accidents  are  due  to  general  conditions,  for  which  no  one  is  specifically 
to  blame.  At  a time  when,  if  accidents  happened,  they  were  generally 
the  result  of  clearly  ascertainable  negligence,  there  was  both  wisdom 
and  justice  in  making  negligence  the  controlling  element  in  the  right 
to  recover ; but  now  that  the  conditions  under  which  the  work  of  our 
day  is  performed  are  such  that  the  greatly  preponderating  propor- 
tion of  accidents  are  due  to  inherent  dangers,  or  to  a complex  and 
confusing  set  of  circumstances  in  which  negligence  is  either  not 
present  or  not  traceable  or  exercises  only  a minor  influence,  the  element 
of  negligence  has  ceased  in  fact  to  constitute  the  usual  determining 
cause  of  industrial  accident,  and  there  has  resulted  a growing  opin- 
ion that  it  should  no  longer  be  regarded  in  law  as  the  determining 
factor  controlling  the  employee’s  right  to  recover. 

The  German  accident  statistics,  which  have  been  gathered  with  the 
most  painstaking  care,  in  this  connection  are  most  illuminating. 


COMPULSORY  WORKMEN^  COMPENSATION  LAW.  7 

These  statistics  are  gathered  from  the  experience  of  a vast  body  of 
workers,  aggregating  to-day  many  millions,  and  they  cover  many  hun- 
dreds of  thousands  of  accidents.  In  the  year  1887  the  percentage  of 
accidents  which  were  due  to  the  negligence  of  the  employer  was 
20.47  per  cent;  those  due  to  the  negligence  of  the  employee,  26.56 
per  cent;  due  to  the  contributing  negligence  of  both,  8.01  per  cent; 
and  due  to  the  inevitable  risks  of  the  industries  and  other  causes, 
44.96  per  cent.  In  the  year  1897,  10  years  later,  there  was  due  to 
the  negligence  of  the  employer  17.30  percent ; to  the  negligence  of  the 
employee,  29.74  per  cent;  of  both,  10.14  per  cent;  and  to  the  inevi- 
table risks,  etc.,  42.82  per  cent.  Ten  years  later,  in  1907,  the  num- 
ber due  to  the  fault  of  the  employer  was  16.81  per  cent ; to  that  of  the 
employee,  28.89  per  cent;  to  both  parties,  9.94  per  cent;  and  to  the 
inevitable  risks,  etc.,  44.36  per  cent. 

Applying  these  figures  to  our  own  country — and  there  is  no  reason 
why  they  should  not  approximately  apply — under  the  most  liberal  j 
employers’  liability  law  which  we  have,  recoveries  may  be  had  by 
employees  in  considerably  less  than  one-third  of  the  accidents  which 
happen,  the  remainder,  more  than  two-thirds,  being  due  to  inevitable 
risk,  the  sole  negligence  of  the  employee,  or  other  causes  not  involv-  * 
ing  negligence  on  the  part  of  the  employer. 

The  labor  bureau  of  Wisconsin  has  given  the  result  of  their  inves- 
tigation of  318  representative  cases  of  personal  injury,  in  which  it 
was  found  that  52.10  per  cent  were  due  to  the  hazard  of  the  industry, 
A rather  careful  examination  of  such  statistics  as  we  have  in  this 
country  convinces  me  that  on  the  average  approximately  one-half  of 
all  accidents  resulting  in  personal  injury  or  death  are  due  to  the 
hazard  of  the  industry  and  that  not  more  than  25  per  cent  are  due  to 
the  sole  or  contributing  negligence  of  the  employer.  It  must  be 
apparent,  therefore,  that  no  matter  how  the  system  of  employers’ 
liability  may  be  modified,  so  long  as  the  employer’s  negligence  re- 
mains as  a prerequisite  to  recovery,  either  by  far  the  greater  pro- 
portion of  all  injuries  must  go  without  compensation  or  many  verdicts 
must  be  based  upon  untruthful  evidence  or  rendered  in  disregard  of 
facts.  Neither  alternative  is  to  be  contemplated  with  satisfaction. 

The  truth  is  we  have  been  thinking  in  terms  of  negligence  so  long 
that  it  is  difficult  to  rid  ourselves  of  the  notion  that  personal  fault  on 
the  part  of  somebody  is  always  a necessary  prerequisite  to  a just  lia- 
bility. The  subject  must  be  approached  from  new  angles.  The  great 
industries  of  to-day  are  engaged  in  producing  commodities  or  in  ren- 
dering services  for  the  general  public.  The  consumers  of  these  com- 
modities or  the  recipients  of  these  services  are  justly  obligated  to  pay 
what  they  cost  plus  a fair  return  upon  the  investment.  The  wTear  and 
tear  of  machinery,  the  cost  of  the  labor  employed,  every  item  of  ex- 
pense entering  into  their  production  or  rendition  is  properly  taken 
into  consideration  in  arriving  at  the  amount  to  be  paid.  The  injury 
of  a workman  resulting  in  loss  of  earning  ability  or  death  as  truly 
enters  into  the  cost  of  production  as  the  breaking  of  a piece  of  ma- 
chinery, only  in  the  latter  case  the  industry  bears  the  expense,  no 
matter  how  the  loss  occurs,  while  in  the  former  the  industry  pays 
when  the  owner  is  at  fault,  and  the  workman  pays  in  every  other  case. 
There  is  no  reason  why  the  industry  should  not  bear  the  expense  in 
all  cases,  collecting  it  in  the  last  analysis  from  the  consumer  just  as 
it  collects  every  other  item  of  expense  entering  into  the  production. 


8 COMPULSORY  WORKMEN^  COMPENSATION  LAW. 

In  earlier  times,  when  few  men  were  employed  by  the  same  em- 
ployer and  few  were  engaged  in  each  occupation,  the  number  of 
accidents  and  consequently  their  cost  could  not  be  foreseen.  From 
the  standpoint  of  anticipation  that  was  wholly  a matter  of  chance. 
But  dealing  with  modern  conditions',  where  vast  numbers  are  em- 
ployed and  a vastly  extensive  field  is  covered,  we  are  able  to  predict 
almost  exactly  not  only  how  many  accidents  will  occur  in  the  course 
of  a year  but  to  classify  them  according  to  the  extent  of  their  severity. 
Thus  we  know  that  in  the  railroad  service  of  the  country  where 
seventeen  hundred  thousand  men  are  employed,  about  four  thousand 
will  be  killed  every  year  and  about  seventy-five  or  eighty  thousand 
will  be  injured  to  a greater  or  less  degree.  In  other  words,  by  the 
vast  extension  of  the  field  within  which  these  accidents  occur  the 
doctrine  of  chance  has  stepped  out  and  the  law  of  averages  has 
stepped  in  as  the  controlling  rule.  It  is  the  unvarying  and  certain 
operation  of  this  law  of  averages  upon  all  human  activities  that  con- 
stitutes the  value  of  all  our  statistics ; that  makes  insurance  a business 
of  scientific  accuracy ; that  in  all  our  large  affairs  enables  us  to  walk 
sure-footedly  toward  the  future.  There  is,  therefore,  no  longer  any 
difficulty  in  determining  what  the  aggregate  cost  to  any  given  large 
industry  the  payment  of  compensation  will  be  where  the  schedule 
of  amounts  is  prescribed,  and  this  cost  can  be  easily  and  exactly 
included  in  the  price  of  the  commodity  or  service.  In  the  case  of  the 
small  industries,  insurance,  mutual  or  otherwise,  gives  opportunity 
for  the  operation  of  the  law  of  averages  by  bringing  a sufficient  num- 
ber of  employers  into  the  same  field  of  risk. 

Whenever  a workman  is  injured  so  that  his  ability  to  earn  a living 
is  impaired  or  destroyed,  somebody  must  bear  the  burden,  and  the 
extent  of  the  burden  is  precisely  the  same  no  matter  how  the  accident 
was  caused.  The  theory  of  employers’  liability  is  to  put  the  entire 
burden  on  the  employer  when  his  causal  negligence  can  be  established 
and  to  leave  the  entire  burden  on  the  employee  in  all  other  cases, 
while  the  theory  of  workmen’s  compensation  is  to  equalize  the  burden 
by  paying  the  injured  workman  half  wages,  or  approximately  that,  in 
every  case  of  injury,  however  caused,  and  for  a period  proportioned 
to  the  extent  of  the  injury.  Such  a rule  results  in  average  justice, 
which  the  more  or  less  haphazard  enforcement  of  the  system  of  neg- 
ligence liability  does  not,  since  a majority  of  injuries  go  without 
any  compensation,  while  of  the  remainder  some  are  fairly,  some  are 
inadequately,  and  some  are  extravagantly  compensated. 

I have  already  stated  that  these  two  theories  of  employers’  liability 
and  workmen’s  compensation  proceed  upon  wholly  different  prin- 
ciples. It  follows  that  any  attempt  to  ingraft  one  upon  the  other  is 
unsound.  The  law  of  workmen’s  compensation,  therefore,  should 
afford  the  sole  remedy.  In  other  words,  it  should  be  compulsory  and 
exclusive.  An  elective  law  is  a legislative  absurdity.  Indeed,  it  is  in 
effect  no  law,  since  “ law  is  a rule  of  civil  conduct  commanding  what 
is  right  and  prohibiting  what  is  wrong.”  The  so-called  elective  law 
commands  nothing — prohibits  nothing.  It  proceeds  upon  the  notion 
that  it  is  right  that  the  employer  should  be  obliged  to  pay  and  the 
employee  should  be  obliged  to  receive  definite  and  fixed  compensation 
for  a personal  injury,  independently  of  fault,  and  then  permits  both 
parties'  to  do  as  they  please  about  it  by  allowing  them  to  elect  in 
advance  whether  they  will  be  bound  by  the  law  of  compensation  or 


COMPULSORY  WORKMEN^  COMPENSATION  LAW. 


9 


the  law  of  liability.  Indeed,  where  the  elective  form  has  been  adopted 
the  justice  and  wisdom  of  compulsion  is  recognized  by  prescribing 
penalties  for  a failure  to  accept  it,  the  usual  provision  being  that  if 
the  employer  elects  not  to  be  bound  he  shall  be  liable  as  at  common 
law  stripped  of  all  the  common-law  defenses  and  that  if  the  employee 
elects  not  to  be  bound  he  shall  be  entitled  to  the  common-law  remedy 
burdened  with  all  the  common-law  defenses.  Such  legislation  has 
been  justly  characterized  as  “ the  highwayman’s  law.”  Ostensibly 
it  allows  those  who  are  affected  to  accept  or  decline;  in  fact,  it 
coerces  acceptance  at  the  muzzle  of  the  legislative  revolver. 

Every  consideration  of  justice  and  economy  likewise  demands  that 
the  law  should  be  exclusive;  that  is  to  say,  it  should  not  permit, 
after  the  accident  has  happened,  a choice  of  remedies  on  the  part  of 
the  employee.  These  considerations  may  be  briefly  stated  as  follows : 

1.  It  is  unjust  to  the  employer,  since  its  effect  is  to  compel  him 
to  respond  for  such  unlimited  and  sometimes  extravagant  damages 
as  a jury  may  see  fit  to  impose,  whenever  his  negligence  can  be  estab- 
lished, and  then  superadds  a liability  to  pay  the  definite  amounts 
prescribed  by  the  law  in  all  cases  where  he  is  without  fault,  includ- 
ing those  where  the  injury  was  due  entirely  to  the  negligence  of  the 
employee.  There  is,  to  say  the  least,  grave  doubt  whether  such  a 
law  is  not  so  arbitrary  in  character  that  the  Supreme  Court  of  the 
United  States  would  declare  it  void  as  constituting  a denial  of  due 
process  of  law.  The  exclusive  law  is  based  upon  perfectly  defensible 
considerations  of  mutual  burden  and  mutual  advantage.  It  compels 
the  employer  to  pay  definite  compensation  in  all  cases,  but  relieves 
him  of  the  liability  to  respond  in  unlimited  damages  in  some  cases.  \ 
It  deprives  the  employee  of  his  right  to  recover  unlimited  damages 
in  some  cases,  but  gives  him  in  exchange  the  right  to  recover  definite 
compensation  in  all  cases.  The  effect  of  it  is  to  make  the  employer 
an  insurer  of  the  safety  of  his  employees  in  a fixed  and  limited 
amount,  but  to  leave  in  his  treasury  the  fund  theretofore  available 
for  the  payment  of  indefinite  damages  to  assist  him  in  meeting  the 
new  obligations.  It  gives  to  the  employee  an  insurance  policy  in 
exchange  for  the  gambler’s  chance,  and  in  effect  says  to  him,  “ You 
may  hereafter  sustain  an  injury,  which  may  or  may  not  be  due  to 
your  employer’s  negligence.  You  may  be  able  to  recover  damages 
or  you  may  not  be  able  to  recover  anything.  This  law  guarantees 
you  the  certainty  of  compensation  in  place  of  the  uncertainty  of 
damages .” 

2.  By  making  the  law  exclusive  larger  compensation  can  be  given 
than  would  be  possible  if  a choice  of  remedies  were  allowed,  since  it 
is  manifest  that  if  the  employers’  liability  to  pay  unlimited  damages 
in  case  of  negligent  injuries  be  continued  and  in  addition  he  be  com- 
pelled to  pay  large  compensation  in  all  other  cases  his  industry  will 
be  taxed  beyond  its  capacity  to  pay.  It  must  be  frankly  recognized 
that  the  compensation  law  substitutes  the  communistic  idea  of  benefit 
for  the  whole  class  in  place  of  the  individualistic  theory  which  per- 
mits a minority  of  the  class  to  recover  much  and  the  majority  little 
or  nothing.  The  justification  for  a compulsory  and  exclusive  work- 
men’s compensation  law  rests  in  the  conception  that  the  workmen 
employed  in  any  enterprise  are  industrial  soldiers,  who  being  in- 
jured in  its  service  are  entitled  to  be  cared  for  to  a fair  and  equitable 
extent,  having  in  view  the  ability  of  the  industry  to  pay.  Theoretic- 


10  COMPULSORY  workmen's  COMPENSATION  LAW. 

ally,  therefore,  we  are  to  consider  that  we  have  a fund,  which,  how- 
ever large,  is  still  limited ; that  this  fund  is  to  be  distributed  among 
the  workmen  who  sustain  injury  resulting  in  disability  and  the  de- 
pendents of  those  who  sustain  injury  resulting  in  death;  that  this 
fund  is  to  be  distributed  not  for  the  purpose  of  penalizing  the  em- 

(ployer,  but  for  the  purpose  of  aiding  the  injured,  and  that  finally 
it  is  better  that  everybody  injured  should  receive  compensation  than 
that  only  a portion  of  those  injured  should  receive  damages  and  the 
remainder  nothing. 

3.  The  double  remedy  will  result  in  a continuation  of  the  great 
waste  which  it  is  one  purpose  of  the  compensation  law  to  avoid.  To 
allow  an  election  of  remedies  is  to  permit  the  injured  employee  to 
still  remain  a bone  of  contention  between  the  personal-injury  lawyer, 
who  urges  him  to  sue  for  the  sake  of  the  contingent  fee  involved, 
and  the  claim  agent,  who  seeks  to  make  inadequate  settlement  in 
order  to  save  the  treasury  of  his  company.  Suits  will  go  on  as  here- 
tofore. Half  of  the  amount  recovered  will  be  lost  on  its  way  from 
the  treasury  of  the  company  to  the  pockets  of  the  employees.  The 
unfortunate  feeling  of  antagonism  between  employer  and  emploj^ee, 
which  now  results,  will  continue  without  abatement.  The  expense 
to  the  taxpayer  incident  to  the  trial  of  personal-injury  cases  will  still 
continue. 

4.  To  allow  an  election  of  laws  or  a choice  of  remedies  destroys 
one  of  the  most  pronounced  advantages  of  the  compensation  prin- 
ciple, namely,  the  element  of  certainty.  So  long  as  we  allow  the  em- 
ployee to  seek  damages  upon  the  basis  of  the  employer’s  fault  or  the 
employer  to  defend  upon  the  basis  of  the  employee’s  negligence, 
just  so  long  will  the  uncertainty  of  the  lav/suit  counteract  the  cer- 
tainty of  the  fixed  schedule  and  just  so  long  will  the  fund  which 
should  be  husbanded  and  utilized  for  the  benefit  of  all  be  frittered 
away  for  the  benefit  of  some.  A compulsory  and  exclusive  law  saves 
the  vast  sum  which  is  now  wasted  and  which  would  continue  to  be 
wasted  under  a composite  system  for  distribution  among  those  who 
are  injured.  Expense  will  be  saved  to  employer  and  employee  and 
to  the  public.  The  only  individuals  who  will  suffer  will  be  the 
personal-injury  lawyer  and  his  lawsuit  hunting  agents. 

5.  A compulsory  and  exclusive  law  will,  in  my  judgment,  prove  a 
powerful  aid  in  the  prevention  of  accidents.  Under  the  liability 
system  the  employer  and  the  employee  are  interested  in  exaggerating 
or  concealing  the  real  facts  in  so  far  as  they  tend  to  prove  or  dis- 
prove negligence,  the  employer  coloring  and  distorting  them  in  one 
direction  and  the  employee  coloring  and  distorting  them  in  the 
opposite  direction.  Between  the  two  the  precise  truth  as  to  how  the 
accident  occurs  is  effectually  concealed.  When  the  employer  knows 
that  he  must  pay  and  the  employee  knows  that  he  must  receive  a cer- 
tain prescribed  sum  wholly  irrespective  of  the  way  in  which  the  acci- 
dent happened,  neither  will  have  any  reason  for  misrepresentation, 
and  we  shall  be  able  to  ascertain  the  cause  of  the  accident,  and  know- 
ing why  and  how  it  happened  we  shall  be  able  to  prescribe  remedies 
which  will  have  a tendency  to  prevent  similar  accidents  in  the  future. 

After  all,  the  vital  objection  to  the  liability  system  is  that  it  does 
not  in  the  main  permit  of  average  justice,  and  this  is  particularly  so 
in  death  claims  Avhere  by  the  death  of  the  employee  quite  often  the 
evidence  which  would  have  established  liability  is  lost.  The  conse- 


COMPULSORY  WORKMENS  COMPENSATION  LAW. 


11 


quences  to  the  dependent  family  of  an  engineer  who  is  killed  as  the 
result  of  his  own  negligence  are  precisely  the  same  as  where  there  is 
no  negligence  at  all  or  where  the  employer  is  at  fault.  Both  families 
have  lost  a provider  and  both  must  be  cared  for.  It  is  certainly  more 
in  consonance  with  sound  public  policy  to  require  that  both  families 
shall  be  compensated  within  fair  and  reasonable  limits  than  that  the 
employer  should  be  penalized  for  the  benefit  of  one  family  at  the 
expense  of  the  other. 

Experience  is  always  a more  valuable  guide  to  human  conduct  than 
precept.  Every  country  in  Europe  except  one  has  abandoned  the 
theory  of  employers’  liability  based  upon  fault  and  substituted  that 
of  compensation  for  accidental  injury  based  upon  status  alone. 
These  laws  have  been  in  operation  in  some  of  these  countries  for 
many  years — in  England  for  IT  years,  in  Germany  for  more  than  a 
quarter  of  a century.  If  they  did  not  on  the  whole  work  well,  if 
they  were  not  of  superior  benefit  to  the  employee  over  the  old  sys- 
tem, we  should  expect  that  long  ago  there  would  have  been  serious 
efforts  for  their  repeal,  but,  on  the  contrary,  the  workmen  in  these 
countries  have  repeatedly  indorsed  their  principles  and  declared 
in  favor  of  their  continuation.  It  is  furthermore  significant  that 
among  the  scores  of  official  and  nonofficial  commissions,  committees, 
and  civic  organizations  in  our  own  country  which  have  investigated 
the  subject,  upon  most  of  which  bodies  both  employer  and  employee 
have  been  represented,  practically  all  have  reported  in  favor  of  the 
principle  of  compensation  as  opposed  to  that  of  employers’  liability. 
If  a widespread  consensus  of  opinion,  based  upon  long  experience, 
careful  investigation,  and  earnest  desire  for  a wise  and  just  solution 
of  a great  problem  can  ever  establish  anything,  surely  it  may  be 
taken  for  granted  that  the  desirability  of  Avorkmen’s  compensation 
is  no  longer  open  to  dispute. 

The  demand  for  a more  or  less  automatic  adjustment  of  compensa- 
tion for  accidental  injuries  to  workmen  is  but  one  of  the  many  phases 
of  a world- wide  movement  for  the  readjustment  of  the  relations  of 
labor  to  capital  and  of  both  to  society  more  in  consonance  with  modern 
notions  of  social  justice.  The  thought  behind  this  movement  is  that 
if  society  en  masse  for  the  general  welfare  may  command  the  self- 
effacing  loyalty  of  each  of  its  constituent  units  society  in  turn  must 
shape  and  preserve  conditions  which  will  protect  each  unit  in  the 
unequal  struggle  for  individual  well-being. 

There  is  a groAving  feeling  that  the  individualistic  theory  has  been 
pushed  with  too  much  stress  upon  the  dry  logic  of  its  doctrines  and 
too  little  regard  for  their  practical  operation  from  the  humanitarian 
point  of  view.  We  are  discovering  that  we  can  not  always  regulate 
our  economic  and  social  relations  by  scientific  formulae,  because  a 
good  many  people  perversely  insist  upon  being  fed  and  clothed  and 
comforted  by  the  practical  rule  of  thumb  rather  than  by  the  exact 
rules  of  logic. 

In  the  rebound,  however,  from  the  old  notion  Avhich,  carried  to  its 
final  conclusion,  compels  each  not  only  to  wage  his  own  battle  for 
existence  and  happiness,  even  though  he  fall  in  the  fight,  but  which 
bids  him  lie  where  he  falls,  there  is  danger  that  Ave  may  go  too  far 
in  the  opposite  direction  and  while  helping  the  weak,  which  is  good, 
encourage  the  indolent,  which  is  bad.  We  must  be  careful  that  in 
the  effort  to  relieve  ourselves  of  the  burdens  which  bear  us  doAvn  we 


12  COMPULSORY  WORKMEN'S  COMPENSATION  LAW. 

do  not  take  away  the  stimulating  necessity  of  personal  effort  which 
compels  us  to  rise.  We  must  find  at  our  peril  the  happy  mean  be- 
tween the  hardship  which  breaks  and  the  coddling  which  saps  our 
strength.  That  in  our  righteous  anxiety  to  minimize  human  suffer- 
ing we  may  miss  this  crucial  point  is  one  of  the  grave  dangers  which 
the  great  civilized  nations  face  to-day.  The  unfortunate  must  be 
cared  for ; the  soldiers  of  industry  who  fall  must  be  lifted  up,  but  no 
deadlier  check  could  be  put  upon  the  upward  march  of  civilization 
than  to  embark  upon  such  a scheme  of  emotional  socialism  as  would 
put  upon  the  backs  of  the  strong  not  only  the  care  of  those  who  can 
not  but  of  those  who  can  but  will  not  bear  their  own  burdens. 

In  framing  our  laws  we  must  never  lose  sight  of  the  vital  distinc- 
tion between  helplessness,  which  is  a misfortune,  and  laziness,  which 
is  a vice.  It  is  a lovely  thing  to  give  in  case  of  need,  but  it  is  a far 
more  important  thing  to  so  adjust  conditions  that  giving  will  not  be 
necessary.  Laws  which  afford  financial  aid  for  the  old  and  sick  and 
unfortunate  who  can  not  help  themselves  are  necessary  and  righteous, 
but  laws  which,  by  insuring  safe  and  healthful  and  remunerative 
work  for  the  young  and  strong,  enable  them  to  care  for  themselves 
in  time  of  misfortune  and  sickness  and  old  age  are  better.  Laws 
which  compel  industry  to  pay,  irrespective  of  negligence,  for  acci- 
dents which  entail  injury  and  loss  of  earning  ability  or  death  are 
commendable  and  desirable,  but  laws  which  will  prevent  the  acci- 
dents are  far  more  so.  Clean,  sanitary  hospitals  for  those  who  are 
torn  and  mangled  by  defective  machinery  or  diseased  by  unwhole- 
some surroundings  are  necessary  and  p-ood,  but  safe  machinery  and 
sanitary  workshops  are  better  still.  In  other  words,  in  dealing  with 
industrial  conditions,  the  prime  duty  of  society,  and  therefore  the 
prime  study  of  the  lawmaker,  should  be  to  prevent  or  minimize  the 
evils  which  give  rise  to  the  necessity  for  assisting  the  helpless,  for  in 
law  as  in  medicine  the  homely  maxim  holds  good,  that  “ an  ounce  of 
prevention  is  worth  a pound  of  cure.” 


o 


